He came forth and saw a great multitude, part 1

When one considers that one of the aims of the House of Commons Treasury Select Committee is to “examine the expenditure, administration and policy of HM Treasury” (see footnote 1) and that, by the time that high-speed trains are running to Leeds and Manchester, the costs of achieving that feat – the great majority of which we can expect to be charged to the taxpayers’ credit card – will have climbed to goodness knows how many tens of billions of pounds sterling, it is amazing how little fuss the Committee has made about the HS2 project.

In the summer of 2013 the Committee did ask some questions about HS2 of witnesses appearing to give oral evidence in connection with its inquiry into the 2013 Spending Round, and devoted just over four pages to the topic in the subsequent report (see footnote 2). This report, whilst not holding a candle to the thorough analysis presented by the Lords Economic Affairs Committee eighteen months later, did conclude that “the Government should formally reassess the project before deciding whether to proceed”.

This reassessment came in the autumn of the same year with the publishing of a controversial report by KPMG and a revision of the Government’s calculation in the documentThe strategic case for HS2. The Treasury Committee marked these events by holding an oral evidence session on the “economics of HS2” in November 2013.

Despite the Chairman remarking during that session that HS2 was “one of the biggest public spending decisions ever undertaken by a government” (see footnote 3) and promising that the “likelihood is we will be asking for more” such sessions (see footnote 4), as far as I have been unable to determine – and please correct me if I am wrong about this – no further evidence sessions have been held by the Committee since then, and the Committee’s thoughts on what they heard in late 2013 have never been committed to a formal report.

So it was unexpected, but welcome, when last autumn the Chairman of the Committee, the Rt Hon Andrew Tyrie MP, lobbed a grenade in the direction of the Government’s ramparts in the form of a letter to the newly-appointed Transport Secretary, the Rt Hon Chris Grayling MP. In this letter, Mr Tyrie raises basic questions about the choice of design speed and route that you might have thought would have been better asked much earlier in the project’s life, but he also offers the telling judgement that “HS2 has the weakest economic case of all the projects within the infrastructure programme, yet it is being pushed through with the most enthusiasm”.

I’m surprised that a time-served politician should find this contradiction remarkable: doing things that defy simple logic seems, to me at least, to be standard fayre for the Westminster crowd, especially when powerful commercial forces are lobbying hard in favour of a project.

It took the Secretary of State almost a full month to reply to his Conservative colleague, and his detailed rebuttal of Mr Tyrie’s reservations about HS2 employs figures and arguments that have been rehearsed many times. Nevertheless, Mr Grayling does make two important observations in his letter. In the first place, he claims that the use of the “value for money” category (poor, low, medium, high or very high) rather than just a point BCR makes the assessment “robust to a wide range of scenarios”. Secondly, he concedes that some of the alternatives to HS2 that have been considered, based upon upgrading the existing rail network, “can deliver high value for money”, but that they were discounted as they “would pose an unacceptable level of disruption to both passengers and freight” and “would not deliver the step change in capacity and connectivity delivers” (see footnote 5).

Barely had the ink dried on Mr Grayling’s letter than a revised business case for the full Y network was published by the Government. If this rehash of the pro-HS2 case was meant to quell criticism it clearly failed to satisfy Mr Tyrie, who, straight after the Christmas/New Year break and even before the return from the Christmas recess, rattled off another missive to the Transport Secretary.

At the end of his letter Mr Tyrie informs the Secretary of State that, as has been the case with the previous two episodes of their correspondence, it was his intention to place “in the public domain” that letter and Mr Grayling’s “response in due course”. I have been unable to find any trace of a reply on the Committee’s website, and conclude that the greater probability is that this is accounted for by the Transport Secretary’s failure to reply, rather than tardiness on publishing any letter from him on the part of the Committee’s secretariat. If this is indeed the case, then I find Mr Grayling’s lack of courtesy to the Committee to be perplexing; after all, though he may be basking in the victory of securing Royal Assent for Phase 1, he still needs to drive both parts of Phase 2 through Parliament, and surely needs to keep influential Commons committees on side, as far as he can.

In the concluding part of this two-part series I will analyse the points made, and questions asked, in Mr Tyrie’s latest letter.

Spending Round 2013 set out the Government’s spending plans for the period between April 2015 and April 2016. For the Committee’s discussion of HS2 see paragraphs 59 to 67 in the reportSpending Round 2013, House of Commons Treasury Committee Third Report of Session 2013-14, September 2013.

See under Q1 on page 1 of the transcript of Oral evidence: Economics of HS2, HC 788, House of Commons Treasury Committee, Tuesday 5thNovember 2013.

See the final paragraph on page 32 of the transcript of the Commons Treasury Committee oral evidence session held on Tuesday 5thNovember 2013.

The Secretary of State appears to be forgetting the severe disruption to Euston station that we can expect HS2 construction work to involve, over a period of seventeen years, and that, as I have argued a number of times, HS2 capacity will not be delivered at the points in the network where it is most needed.

Important Note: The record of the proceedings of the Commons Treasury Committee from which the quotes reproduced in this blog has been taken is an uncorrected transcript of evidence, which is not yet an approved formal record. Neither witnesses nor Members have had the opportunity to correct the record in such instances, and it may therefore be subject to changes being made in the light of any such corrections being requested.